- Judith Akatugba
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In order to resolve a lawsuit brought by shareholders regarding a security flaw at the now-defunct Google+ social media platform, Google agreed to pay $350 million.
After more than a year of mediation, a tentative deal was submitted late on Monday in federal court in San Francisco. U.S. District Judge Trina Thompson must approve the arrangement.
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It disproves allegations that Google knew by March 2018 of a three-year software bug that exposed the personal information of Google+ users, but kept the issue under wraps for months while emphasizing its dedication to data security.
According to shareholders, Google was afraid that disclosure would expose it to public and regulatory scrutiny, much like what happened to Facebook when London-based Cambridge Analytica obtained user data for the 2016 US elections.
The complaint claims that as soon as word of the flaw spread, shares of Alphabet, the parent company of Google, dropped numerous times, wiping out tens of billions of dollars in market value.
The case covers Alphabet shareholders from April 23, 2018, to April 30, 2019, and is being launched by Rhode Island Treasurer James Diossa on behalf of a state pension fund that purchased Alphabet stock.
In accepting the settlement, Google denied any wrongdoing and said it had no proof that the data had been misused.
“We regularly identify and fix software issues, disclose information about them, and take these issues seriously,” a spokesperson, Jose Castaneda, stated. We are happy that the issue of this out-of-production product has been rectified.”
In 2020, the Mountain View, California-based corporation and Google+ members came to a $7.5 million settlement.
The shareholder action was dismissed by a different court in 2020, but it was brought back in 2021 by the 9th U.S. Circuit Court of Appeals.
“The majority of people believed that no money would be recovered in this case, and the ‘I told you so’s’ were deafening when the first judge granted Google a dismissal,” stated Jason Forge, a partner at Robbins Geller Rudman & Dowd, who is defending the shareholders. “That just made Rhode Island and us more determined.”
According to court documents, the shareholders’ attorneys could be able to collect up to $66.5 million in fees from the settlement.
The settlement was made public on Monday, five and a half weeks after Google resolved a lawsuit alleging that it surreptitiously monitored the internet activity of millions of users who believed they were browsing in private. The settlement’s terms have not yet been made public.
In re Alphabet Inc Securities Litigation is the case number for the Northern District of California U.S. District Court case, which is 18-06245.
